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T. Reed and S. Riley are partners with equal capital balances of $60,000 each. They agree to let R. Smith invest $30,000 in their partnership
T. Reed and S. Riley are partners with equal capital balances of $60,000 each. They agree to let R. Smith invest $30,000 in their partnership for a 25% interest, which means that R. Smith's beginning capital balance will equal $37,500 with each existing partner contributing a $3,750 bonus to Smith. The journal entry to reflect this transaction will include a debit in what amount and to which of the following accounts?
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